What do Hedge Fund Managers do?

Hedge funds are a type of investment that is only for those with extra hundreds of thousands of dollars lying around. The funds are high value, risky and not regulated by the U.S. Securities and Exchange commission because they are considered “private offerings.”

The only goal for a hedge fund is to turn a substantial profit for the investors and it is the full time job of the hedge fund manager to work hard to make that a reality.

Who are hedge fund managers?

Hedge fund managers are professionals entrusted to make hedge fund investments grow. They research, select stocks and assets for the funds, crunch numbers, implement the hedge fund strategy and monitor the daily health of the investments. If the situation requires it, the hedge fund managers will partake in short-selling or leverage strategies to help buff up the value of the hedge fund. 

How do you become a hedge fund manager?

More business schools are providing “investment management” majors due to industry trends and the demands of the student body. Investment managers, including hedge fund managers, oversee trillions of dollars of industry annually. Hedge fund managers must be skilled and educated in business, finance or economics to make a professional go at this complicated and competitive financial industry.

The efforts of a hedge fund manager is focused on overseeing the net asset value of a hedge fund. That value typically runs into the billions of dollars range and the total amount can become even more staggering when leverage is considered in the equation. Being a hedge fund manager can be quite lucrative for the employee as they get paid both a management fee (typically 2% of the fund’s net worth) and an incentive/performance fee (composed of 20% of the fund’s profit).